Tony Blair has admitted for the first time that he regrets the way his lengthy departure has created 'uncertainty' for a government now racked by a divisive battle over who will succeed him.

In a wide-ranging interview with Mary Riddell in today's Observer, the Prime Minister spoke frankly of his doubts over whether he had done the right thing by pre-announcing that he would not fight a fourth election. But he suggested the upheaval could have been worse if he had not been open about his intentions, and said he hoped his departure would finally draw the sting over the war in Iraq. Blair also quashed speculation about a snap election to give Gordon Brown a mandate as leader, suggesting it would be a 'significant time' before Britain next goes to the polls.

'It wasn't really my desire last year to have a situation where all this uncertainty was created,' Blair said. 'There is always a debate about whether I was sensible to say I wouldn't fight a fourth election - though personally I think I'd have had a load of different problems if I hadn't.

'It hasn't been easy, but I'm pretty sure it wouldn't have been easier if I hadn't said it. Mrs Thatcher kept saying she was going on and on because people kept asking her, and in the end she got absolutely belted and chucked out.'

In his interview, Blair refused to rule out the possibility that David Cameron could win the next election, insisting he was not going to speculate. Nonetheless he said Labour should not be disheartened: 'Now they've decided to get competitive, our response should not be fearful. We should say: "Right, we're in a fight, so let's see who's got the best policies and agendas." Across a range of issues, we do.'

The Observer can reveal that senior Labour figures now fear open civil war. Former leader Neil Kinnock last week pleaded unsuccessfully with Charles Clarke - who yesterday refused to rule out running for the leadership against Brown - not to launch his website, ostensibly aimed at 'debating Labour's future', because it would be divisive.

Blair declined to offer more endorsements of Brown, but referred back to a 'myriad of complimentary things I have said in the past' about him.

Asked whether he thought the Vision2020 website launched by Clarke and Alan Milburn was stirring up trouble, Blair said: 'Look, you're going to have to go through a transition of leadership. It's just a question of how you manage that process. Of course it's difficult. It's a test of your maturity to do it easily.' The public would not mind a 'sensible debate' about the future, he said.

He also signalled a fresh attempt to capture female votes, challenging the Tories' recent incursion on issues such as family life by focusing on the likes of so-called 'Asda Woman' - women in ordinary jobs, struggling to combine work and family.

Labour's views on the family were 'right and better' than the Tories', he said. 'Tax breaks in marriage are not a sensible use of resources. Marriage is a good thing, but you're trying to support children.

'It's hard to see why you would want to support a married couple without children rather than a lone parent whose husband may have left her through no fault of her own and who is trying to bring up two children. Of course we should try and support marriage in whatever way we can, but to reduce support for lone parents isn't justified.'

And he attacked Cameron himself for lacking substance: 'I could once have just stood up and been a touchy-feely politician people kind of liked and who looked a bit different from the normal. That wouldn't have got me home.'

Speaking after a visit to an Asda supermarket to chat to female voters last Thursday, Blair admitted there was still 'a real problem for mothers of young children' while the pay gap was 'ridiculous'. But asked whether women had begun deserting Labour because of opposition to the war, he said: 'Last time we did well with women, and Iraq was a factor then. In a sense, when I go, that goes with me.'

Blair is widely expected to announce his departure at the beginning of May. However he dismissed suggestions that he could emigrate to the US when he quits. 'I don't know why people go on about America,' he said. 'I'm not saying that as the time approaches, I won't [make plans], but you have to give this job your all.' Instead he would pursue climate change, Africa and inter-faith issues.

The Prime Minister and Chancellor will share a platform this week to outline a major rethink of the welfare state, cutting payments to single mothers and bringing in private employment agencies to encourage benefit claimants back to work. Their joint appearance is being seen as a symbol of unity after days of infighting - likely to be further inflamed by suggestions from one senior Blairite this weekend that ministers resented Brown because 'they don't want to operate in the world of the Gestapo'.

Milburn and Clarke will ratchet up the debate this week by moving onto education. In a blog on the 2020 site this weekend, Milburn will warn the school admissions process - which has seen ferocious competition for places - risks wrecking confidence in education, adding: 'Confidence in state education won't be sustained in the long term if parents feel the system cannot accommodate the needs of their individual child.'

And Clarke yesterday heightened tensions by telling the Financial Times that while 'my assessment is that I am not likely' to run for the leadership, he would not decide until May.